The word "franchise" comes from Old French meaning privilege or freedom.
As economies evolved, so did the concept of franchising. It is believed that our current concept of franchising comes from the mid 1800s when a major German beer brewer granted certain taverns the exclusive right to sell their beer and use trade name SPATEN.
The earliest signs of franchising in the United States dates back to the 1850's just after Isaac Singer invented the Singer Sewing Machine. During his search for an effective and affordable way to distribute his product, Singer ran into a couple of problems that prevented his company from becoming successful.
Singer's first problem was a lack of sufficient capital for manufacturing his machines. Secondly, no one was willing to buy his sewing machines without first being taught how to use them, which required effort that most retailers wouldn’t provide. Singer's solution was to charge licensing fees (franchise fees) to business people who would own the rights to sell his machines in certain geographical areas. The franchisees would also be responsible for teaching consumers how to use his machines, thereby creating sales opportunities.
Using the licensing fees to fund manufacturing, he was then able to afford to build his machines and then ship them directly to his newly formed distribution network.
Singer was the first company in the US to tap the power of franchising and made him and many franchisees very wealthy.
Singer's idea got noticed; and over the next several decades, many other companies began to copy and enhance his business model. At first, companies like Coca-Cola introduced franchising into their bottling and manufacturing areas in order to reduce financial risk, gain market share and bottle coca cola closer to the population centers thereby cutting down on trucking costs.
Automobile manufacturers used a network of licensed dealerships to sell and service their automobiles. Oil companies did the same thing with gas stations to keep those automobiles moving.
Later, companies such as McDonald's and Burger King took Business Format franchising to a whole new level by creating some of the largest franchise networks in the world.
Today, there are thousands of successful franchise brands with outstanding business models that provide products and services to consumers and businesses all around the world!
According to a study done by PricewaterhouseCoopers franchised businesses are responsible for 40% of all retail sales in the US. There are over ¾ of a million franchise establishments that generate almost a trillion dollars in sales. Franchises employ over 18 million people in the US directly and over 25 million indirectly.
The history of franchising. - To learn more about this author, visit Jim Coen's Website.
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What is franchising? My personal definition!
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Working in the franchising community for 25 years, I have come to define the concept of franchising, based on my personal experience.
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Jim Coen
(Visit Jim's Website)
With 25 years of franchise, marketing, and
entrepreneurial experience, and the owner
of Franchise Perfection, Jim Coen, brings
key skills to franchise consulting for
those interested in buying a franchise
business opportunity.
At Franchise Perfection we serve as
franchise consultants and advisers,
“matching you with the perfect business”.
Visit: www.franchiseperfection.com/ind
ex.htm
For over 20 years Jim worked with Super
Coups. which is a MA based direct mail
franchise that delivers money saving
coupons from local businesses to your
mailbox. His responsibilities at Super
Coups included: franchise marketing,
franchise training, sales management,
regional sales, and director of Franchise
Development.
Prior to Super Coups Jim successfully
marketed franchises in the New England
area for Uniglobe Travel Northeast a
travel franchise, Merry Maids a maid
cleaning franchise, & Emack & Bolio an Ice
Cream franchise.
Jim recently was the host of a popular
radio show called “Let’s Talk Franchising”
that aired on WBIX 1060 in Boston.
Jim currently serves on the Board of
Directors of the New England Franchise
Association (NEFA) www.nefranchis
e.org
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Let's Talk Franchising! - I have learned franchising from the ground up. I’ve been a franchisee for a bad franchisor. I’ve worked for good franchisors and I’ve worked for marginal franchisors. I’ve helped many franchisees succeed.
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Jim Coen's
Complete
List Of
Franchises
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